NEW DELHI: With domestic firms announcing new M&A deals every other day, showing a huge appetite for growth backed by a robust economic expansion, India has surprisingly lost its place as the world's second largest home to "super growth" companies to a relatively unknown Armenia.

While the US has retained its top position on Grant Thornton International's Super Growth Index for third year in a row, India suffered a dramatic drop to 14th position as the country's proportion of super growth companies halved from 34 per cent to 15 per cent.

India has been replaced by a newcomer Armenia at the second position with 38 per cent proportion of super growth companies there, as against 44 per cent in the US, said the study, released on Sunday, by global consultancy major Grant Thornton.

The US tops the Grant Thornton International Super Growth Index for the third year running. 44% of US companies hit ‘super growth1’ status, an increase of 5% over the previous year. The Index measures the country with the highest proportion of “super growth” companies.

This year Armenia (38%) has replaced India in second position. Indian companies suffered a dramatic drop to 14th in the table as the country’s proportion of super growth companies halved from 34% to 15%. Ireland has maintained a top five ranking (29%; No.3) and is joined by the UK (26%/No.4) and South Africa (25%; No.5), up from tenth position last year.

The Super Growth Index 2007, now in its fourth year, is a unique research project which forms part of the Grant Thornton International Business Report (IBR). The report covers the opinions of 7,200 privately held businesses in 32 countries and represents 81% of global GDP.

63% of super growth companies believe globalisation presents more of an opportunity for their company, compared with 55% of all businesses in the survey super growth companies say the availability of a skilled workforce is considered to be a greater constraint than for companies in general (44% compared with 36%) red tape and regulation is another major concern for one in three (32%) super growth companies super growth companies are considerably less constrained in their ability to raise long-term finance with just 13% quoting this as a problem compared with 21% of companies overall.

Super growth companies are typically more positive on balance about their prospects than companies in general on a number of other indicators including: turnover - 87% compared with 70%; employment - 67% compared with 45%; and profitability – 66% compared with 52%.

'Super growth' companies are defined as those which have grown considerably more than average. To identify 'super growth' companies, Experian Business Strategies, the economics consultancy, took four key indicators to create a weighted index. The four indicators were: absolute growth in turnover (adjusted for inflation); the percentage growth in turnover (adjusted for inflation); absolute growth in employee numbers; the percentage growth in employee numbers. By this measure, 23% of all privately held businesses surveyed worldwide are classified as 'super growth'.